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Seattle's AI Surge: 25,000 Jobs & The New Tech Boom · Industrial Advisors

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  We're gonna cover all things tech boom, specifically to the
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  northwest, 'cause it's booming.
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  Yeah.
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  Right?
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  All things kinda AI, defense, tech, um- Space.
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  And we're… Yeah, space.
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  We're gonna walk through the deals going on, 'cause it's, it's significant.
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  I'd say this is the most significant thing, I'd say, since the COVID boom.
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  Yeah.
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  Right?
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  Yeah.
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  It's interesting, we saw this kind of happen in San Francisco over
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  the last- Yes … six to 12 months.
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  So we figured, we usually lag those markets, so we figured this was
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  coming, and now we're fully seeing it.
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  I mean b- d- like overnight.
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  Welcome to the Industrial Advisors podcast.
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  Uh, you've got your hosts here, Matt McGregor and Kyle Beck.
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  Welcome, Kyle.
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  Thank you.
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  Appreciate it.
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  Uh, we're gonna cover all things tech boom, specifically to the
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  northwest, 'cause it's booming.
• 0:56
  Yeah.
• 0:56
  Right?
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  All things kinda AI, defense, tech.
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  Um- Space … and we're, yeah, space.
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  We're gonna walk through the deals going on, 'cause it's, it's significant.
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  I'd say this is the most significant thing, I'd say, since the COVID boom.
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  Yeah.
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  Right?
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  Yeah.
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  It's interesting, we saw this kind of happen in San Francisco over the last- Yes
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  … six to 12 months, so we figured we usually lag those markets, so we figured this was
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  coming, and now we're fully seeing it.
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  I mean b- d- like overnight, right?
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  Quickly.
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  Yeah, yeah.
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  Crazy.
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  Uh, well let's talk about the deals going on out there.
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  Yeah.
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  The first one I think is the most exciting and probably the newest
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  one is Shield AI at Panattoni's Des Moines Creek West building.
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  Finally announced this morning.
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  Finally.
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  'Cause everybody thought it was Anduril.
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  Right.
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  Right.
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  For a long time everyone thought it was.
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  This is- Including myself.
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  Yeah.
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  This is a super cool company.
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  They leased the full building.
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  Shield AI will be producing and manufacturing autonomous fighter jets,
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  which will be about half the size of an F-35, so only 26 feet long.
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  They'll take off and land vertically- It's crazy
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  which is crazy, like a rocket ship, so you don't need a runway- Yeah … which
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  changes the game in terms of warfare.
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  They'll look to add an additional million square feet in our region
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  over the next couple years, so they're gonna grow very, very quickly.
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  I read they just raised about $2 billion in VC money, and they're valued at almost
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  13 billion, so a big, big AI startup.
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  And what's the hiring look like?
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  'Cause they, they came here for labor.
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  They looked at over a dozen site locations and came to Seattle
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  because of our labor pool.
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  Obviously with Boeing, Blue Origin here, SpaceX with a presence
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  and a lot of space companies.
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  They came here for that labor pool, and it's the reason they wanted to
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  stay kinda near the Kent Valley, right?
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  To tap that Blue Origin- Yep … and Boeing labor pool.
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  I think I read it'll add about a 4,000 jobs im- almost immediately
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  over the next couple years.
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  Oof.
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  And over the next 20 years, indirect and direct, could add over 25,000
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  jobs over the next 20 years.
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  So a huge impact to the market.
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  I mean, this has to be the most significant, you know, job growth
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  since we've had, probably since Blue Origin went down to Kent- Yeah
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  you know, and exploded down there- No question … you know, 10 years ago.
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  No question.
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  Yeah.
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  So, huge.
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  And they expect the first jet to roll off the line in 2028, only two years-
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  That's insane … down the road.
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  And then kind of ramp up production by 2030.
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  What a cool deal.
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  Yeah.
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  That's awesome.
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  Really, really cool deal.
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  Congratulations to Panattoni- Yeah … uh, knocking that deal out.
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  Next one up, this one, uh, you know, a- as we all know, it's, it's rumor mill, right?
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  This could be one and the same or it could be two deals, right?
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  Yep.
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  Kinda think it's one and the same.
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  Yeah.
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  But we understood there is another tech company that is taking down 400,000 feet
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  in the, in the north part of the valley.
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  We also heard Blue Origin's taking down 300,000 feet.
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  This might be one and the same, right?
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  Yeah.
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  Yeah.
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  Definitely could be, but an immediate deal.
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  Yeah.
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  Blue Origin's kinda pump-faked the market several times over the last three years.
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  Right.
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  This one looks like it's real.
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  Yeah.
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  Right?
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  So another space-related deal.
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  Yeah.
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  So it's either 3 to 400,000.
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  We think it's one deal.
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  We think it's Blue Origin.
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  We've got that from about three different sources, but there could be two deals.
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  Yep.
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  Yes.
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  On, on that specific one.
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  Yeah.
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  And then the next one, uh, I think, uh, most people know about this one.
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  Stoke A- A- what are they?
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  Stoke Aerospace or what are they?
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  Stoke Space.
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  Space.
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  Yep.
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  Yeah.
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  So the Pacific racetrack went up for sale recently.
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  They have a interesting zoning code because the noise ordinance u- up there.
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  Yep.
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  Right?
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  So they, whatever… I, I read this years ago, but, uh, they have very specific
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  and unique zoning overlays related with the racetrack noise ordinances.
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  So when they went out to market for this, they found Stoke, and I think
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  they're interested in testing some sort of rocket launchers, right?
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  Yeah, yeah, yeah.
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  When you say noise ordinance, you can be loud out there- Loud, yes … actually.
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  Yes.
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  Not, not quiet.
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  'Cause it's rural.
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  Right.
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  Yeah.
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  Right.
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  It, it's north of Auburn, up by Highway 18 in, in, uh, unincorporated King County.
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  Yeah, it sounds like they're gonna build a big bomber of a building up
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  there, and then also test rockets, which will be a massive deal.
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  Yeah.
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  Do we know if the racetrack will continue, or is that gonna probably end?
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  Yeah, I'm not sure.
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  Okay.
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  It's a good question.
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  Yeah.
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  So, uh, in any event, that's the rumor mill that we think
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  they're gonna be up there.
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  We think they're under contract, and we think they're gonna test very loud rockets
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  up in unincorporated King County- Yeah … on the current- Pacific Raceways site.
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  Uh, next- Ne- … we move to Everett.
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  Yeah, we'll go to the north end and hit ano- yeah, another space company.
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  Actually, a satellite company this time called Kupper, who already occupied about
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  250,000 square feet up in that north end part of the market, but just took
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  an additional 91,000 square feet with a pretty big office build-out, I think
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  almost 10,000 square feet of office.
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  So another, you know, satellite space company growing.
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  Likely with that office count, I'm sure they're adding a good amount
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  of jobs to that facility as well.
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  So just more growth in that space sector that we're seeing.
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  That's right.
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  And then I think, uh, it's probably not the last one, but the last big
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  one is, uh, it's called RAM, right?
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  RAM, Project RAM.
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  Yep.
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  Project RAM is coming through the Economic Development Council of
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  Pierce County, so they're leading it.
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  It looks like they're in the immediate need of at least 150,000 square feet
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  of space, but on 50 to 100 extra acres of land with a ton of power.
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  Yeah.
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  So that is a requirement that's been widely broadcasted.
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  I think sites were due last Friday.
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  Yep.
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  It looks like they wanna be in Pierce County.
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  Could be du- du- due to the power rates down there.
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  Tacoma Power's, uh, you know, cheapest power in, in the region, right?
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  Yeah.
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  And so that could be a driving, uh, point.
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  They won't have a lot of options, mostly if they wanna occupy and have that
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  kinda significant, uh, yard area, right?
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  Or n- whatever- Right.
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  Whatever it is … what- whatever it is, drones, whatever it is.
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  Uh, but a bi- it's gonna be a monster of a deal.
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  Big deal, and their timing is Q3 of next year, which, you know,
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  that's gonna be very hard to hit.
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  Yeah.
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  Especially with that power requirement.
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  That's right.
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  Pulling that much power, so we'll see if they actually hit that timing,
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  but it's good to see that, you know, again, immediate investment wanting
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  to be placed here in, in our region.
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  Yeah.
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  The one, uh, uh, going back that we skipped to, uh, moving into South
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  Seattle, again, this is a little outside of aerospace, because all
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  these other ones are robotics, aerospace, and- Kind of goes back to
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  AI … yeah, but it does go back to AI.
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  Yeah.
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  Which is Waymo.
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  Right.
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  So Waymo is rumored to be taking down about 150,000 feet.
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  I forget the size of that building.
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  Yeah, 145.
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  The new Emerald Building in South Seattle that Prologis built.
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  Yeah, 145.
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  145. Yep.
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  So, uh, this would be, is it the kind of their, more of their service center?
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  Exactly.
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  Uh, yeah.
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  Yeah.
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  Cars maybe drive themselves down there if they need tire rep- you know, tire
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  replacements, things like that, or maybe get towed down if they get into a wreck.
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  Yeah.
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  Um, but their service center.
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  Rivian has a service center there in that same park, so a logical choice for Waymo.
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  Yeah, yeah.
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  I think it's a good location, easy access to highways there.
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  I had heard, interestingly enough, yesterday, that they, uh, were looking
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  at a building closer into the city, believe it or not, because there was
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  so much transient activity around it.
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  The programs for the cars were having a problem- Oh,
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  interesting … because of campings and RVs and people walking around.
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  And so it was i- interesting listening to, to that.
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  But it makes sense to go down there.
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  I think you have less of it there, and you're much closer to Highway access Yeah.
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  Yeah, and from what we've heard, that'll be a great rate for the market.
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  So ProLogis- Yeah, it'll be great … will do great there.
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  Yeah, absolutely.
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  But here's the crazy thing.
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  I mean, if you look at this across the board, and there's probably
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  more that we don't know, right?
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  We've dug, right?
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  Yeah, yeah.
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  And just to throw it out, Cowboy Space obviously just took
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  300,000 square feet- That's right
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  another space deal in the Kent Valley.
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  Yeah.
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  But yeah, go on.
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  W- okay, so if you look at all this, this has really been… I, I would say
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  w- i- if you looked at this list six months ago, what would've been on here?
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  Well, first of all, we wouldn't have recognized the names
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  Cowboy Space, Shield AI.
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  Stoke Space we know, but they're, they were smaller- Yes
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  right?
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  Yeah.
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  In the Kent Valley.
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  Waymo wasn't in our market.
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  No.
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  These are all new to market deals.
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  Yes.
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  And you would have more, you know, your, your typical distribution 3PLs, maybe
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  some e-commerce users on this list.
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  Yeah.
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  So imagine, 'cause we heard, you know, when we were watching, you know,
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  kind of the greater San Francisco market six months ago, and we were
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  like, "Where are all the deals?"
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  Imagine what this might look like in a few more months if we look at this and say,
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  "All of these deals look imminent." Yeah.
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  And none of them existed i- six months ago, maybe with the exception of Stoke.
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  But Stoke, I think, came in because of an unique opportunity.
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  Right.
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  Right?
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  And I think Waymo was in the market quietly, but- Yeah
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  still it's a, it's a new- Yeah … to market deal.
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  But the majority of this square footage wasn't on any paperwork-
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  Right … six months ago.
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  Yeah, no question.
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  And the tech is moving so fast.
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  I mean, who knows what's gonna be on this list in six months.
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  That's right.
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  Crazy.
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  So.
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  Crazy tech boom.
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  We needed it.
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  Yeah.
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  Right?
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  This will be a nice lift for our market, a welcome change, and, um,
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  yeah, this is, uh, interesting times.
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  Fun times, and yeah, we're looking forward to seeing what else happens.
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  All right.
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  Happy Friday.